The U.S. Department of Labor is expected to move quickly to undo the Biden administration’s signature labor policies soon after Republican President-elect Donald Trump takes office, and could play a key role in Trump's efforts to pare back the number of immigrant workers. Trump's appointees to the agency are also expected to revive a number of regulations from his first term that were opposed by unions and worker advocates and rescinded during the Biden administration.
INDEPENDENT CONTRACTORS
One of the Labor Department's top regulatory priorities will likely be repealing a major rule that made it more difficult for businesses to classify workers as independent contractors rather than their employees, which has been criticized by trade groups, app-based service providers like Uber and DoorDash, and many “gig” workers. Several legal challenges to the rule are pending.
Requiring that more workers be treated as employees would likely increase labor costs not just for app-based services but for businesses in many other industries that rely on contract labor or freelancers, such as trucking, manufacturing, and healthcare. Most federal and state labor laws, such as those requiring a minimum wage and overtime pay, apply only to a company's employees and not to contractors. Studies suggest that employees can cost companies up to 30% more than independent contractors.
The Trump administration is expected to replace the rule with a regulation favored by business groups that focuses on the amount of control companies have over workers and whether workers have an opportunity to profit from an investment to determine worker classification. DOL took that position in non-binding guidance released in 2019, which was withdrawn two years later by the Biden administration.
OVERTIME PAY
The Biden administration's push to expand mandatory overtime pay to millions of salaried workers is also on the chopping block. DOL will likely drop an appeal of a Texas judge's November decision that said a rule adopted earlier this year improperly bases eligibility for overtime pay on workers' wages rather than their job duties.
The rule would have required employers to pay overtime premiums to salaried workers who earn less than $1,128 per week, or about $58,600 per year, when they work more than 40 hours in a week, beginning Jan. 1, and it had temporarily raised the threshold to about $44,000 per year on July 1. The first Trump administration set the bar at about $35,500, which many Democrats and worker advocates have said is too low. Business groups pushed back against the Biden administration rule, and DOL under Trump is not expected to defend it or otherwise raise the salary threshold.
WORK VISAS AND IMMIGRANT HIRING
Much of Trump's hardline rhetoric on immigration has focused on deporting people who are in the United States illegally. But his administration is also expected to limit opportunities for immigrants to work legally in the country, an area where the Labor Department holds considerable sway.
DOL is expected to revive various policies from Trump's first term aimed at limiting the number of visas issued to foreign workers, some of which were struck down in court. That will likely include narrowing the definition of "specialty occupations" eligible for certain H-1B visas, which are used disproportionately in the tech sector, and raising the minimum wages that highly-skilled H-1B workers must be paid.
The Labor Department could also make it more difficult for employers to establish that they cannot find American workers to fill agricultural and low-skilled positions, a requirement to hire workers through the H-2A and H-2B visa programs, and restrict work authorization for student visa holders.
DOL's Office of Federal Contract Compliance Programs could also bring complaints against federal contractors, including many tech firms and other large companies, for discriminating against American workers by opting for cheaper foreign labor.
WORKPLACE SAFETY
DOL's jurisdiction also extends to workplace safety, and the Trump administration is likely to usher in significant changes at the Occupational Safety and Health Administration. The department is expected to move to get rid of a rule that took effect in May allowing third parties, such as union representatives, to accompany OSHA officials on worksite inspections. Business groups have criticized the rule, saying it unnecessarily gives unions access to workplaces they are trying to organize even when a representative has no expertise in safety regulations.
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